As the 2022 tax season gets underway, some parents look forward to receiving a tax refund after applying all the available deductions, exclusions, and credits they get for their dependent children. If you are a divorced parent, navigating the IRS tax laws relating to who can claim children can seem like walking through a minefield. It is always in your best interest to consult with a divorce lawyer and/or tax professional when preparing your tax return. In the meantime, a Murfreesboro divorce lawyer at Bennett | Michael | Hornsby discusses how to navigate tax time as a divorced parent.
Tax Deductions, Exclusions, and Credits
Although computing your federal tax obligation can be incredibly complicated, it boils down to adding up your taxable
income and subtracting from that total all allowable deductions, exclusions, and credits. If a child meets the qualification tests, a child may help lower your tax burden in several ways, including:
- Allowing you to file as head of household
- Allowing you to claim the child tax credit/credit for other dependents
- Allowing you to claim the dependent care credit/exclusion for dependent care benefits
- Allowing you to claim the dependent care credit/exclusion for dependents care benefits
- Allowing to qualify for the Earned Income Tax Credit (EITC)
What Does Your Divorce Decree Say?
Generally, only one person may claim a child for a tax credit, exclusion, or deduction. If there is a dispute regarding who may claim a child, or you are otherwise unsure if you have the legal right to claim a child, one of the first things you should do is check your final divorce decree. Sometimes, a final decree will address the issue directly by stating who has the right to claim the child, alternating years between the parents, or alternating the children between the parents. Keep in mind, however, that you must still qualify according to the IRS rules.
What Happens If Both Parents Qualify?
If the divorce decree is silent, or you remain concerned about who can take a credit, exclusion, or deduction, you should refer to the IRS tests used to determine if a child is a qualifying child. Sometimes, however, a child meets the tests to be a qualifying child of both parents. Only one parent can treat the child as a qualifying child for any or all of the deductions, exclusions, and credits.
The IRS “tiebreaker” rules apply if more than one person (including parents) can claim the child. The tiebreaker rules state that:
- If the parents don’t file a joint return together but both parents claim the child as a qualifying child, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time during the year.
- If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher AGI for the year.
- If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who had the highest AGI for the year.
- If a parent can claim the child as a qualifying child but no parent does so claim the child, the child is treated as the qualifying child of the person who had the highest AGI for the year, but only if that person’s AGI is higher than the highest AGI of any of the child’s parents who can claim the child.
What If We Are Separated but Not Legally Divorced?
If you were separated, or a divorce was pending, on December 31, 2022, the IRS applies special rules to determine who can claim a child. If the requirements of the special rule are satisfied, then the child is treated as the qualifying child of the noncustodial parent for purposes of the child tax credit/credit for other dependents, while the custodial parent may claim the dependent care credit and EITC, under the general rules.
Contact a Murfreesboro Custody Lawyer
If you have questions or concerns about claiming your children for tax purposes during or after a divorce, contact a Murfreesboro divorce attorney to discuss your legal options. Contact the team at Bennett | Michael | Hornsby as soon as possible by calling 615-898-1560 to schedule your free appointment.
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